April 23, 2017 by Prakash
Malankar
The Union cabinet is set to approve
next week a new Rs 5,000-crore pension formula that is expected to benefit more
than five million central government employees.
Official sources said the new
formula will calculate pension based on the latest drawn salary for a
particular post.
“If a person retired as a director
under the sixth pay commission, ten years later his pension would be fixed
(based on) the salary of a director in the seventh pay commission,” explained a
senior government official.
“The new pension scheme will be put
up to cabinet for approval next week.”
The new method was fixed by an
empowered committee of secretaries (Ecos) headed by secretary (pensions).
The seventh pay commission
recommended that pension could be calculated by two methods: One, pension would
be 50% of the last salary and multiplied by 2.57. The second was an incremental
method where pension was fixed at the last salary drawn with adjustments of
increments drawn in that particular pay band.
The incremental method was found to have
lacunae as 20% of records were found to be missing in various government
departments, and officials felt this could lead to litigation in future.
“To avoid legal hurdles, the Ecos
came up with the pay fixation method,” explained the senior official.
Source: HT
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